By Enyichukwu Enemanna
The Central Bank of Kenya (CBK) has announced that it will lift the suspension placed on the issuance of new licences to commercial banks in the country.
The moratorium, in place since 17 November 2015, will be lifted effective 1 July this year, CBK said in a statement on Wednesday.
The suspension was put in place against a backdrop of governance and operational challenges in the banking sector at the time.
The action was also necessitated by the need to provide space for strengthening the Kenyan banking sector, CBK said.
The apex bank said the lifting of the suspension has been informed by the strides made in strengthening the legal and regulatory framework guiding the operations of the banking sector.
It added that the move has also been prompted by the growing number of bank mergers and the influx of foreign investors into the sector.
“Since then, significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector. Notably, there have been several mergers and acquisitions by existing players and the entry of new domestic and foreign strategic investors into the sector,” CBK stated.
“The recent increase in the Business Laws (Amendment) Act, 2024, of the minimum core capital requirements for commercial banks to KSh10 billion will further reinforce the strengthening of the banking sector,” it added.
Following the lifting of the moratorium, new entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of KSh10 billion.
CBK revealed that with the window opened for new entrants into the industry, more Kenyans will be able to access a wider range of banking products that will contribute significantly to meeting the country’s development needs.
“Stronger and more resilient banks will be able to navigate the growing risks in the global, regional, and domestic arenas. Additionally, they will be able to support large-scale financing needs to meet Kenya’s development aspirations,” it added.
